THE EFFECT OF SOCIAL MEDIA ON

CONSUMER’S DECISION MAKING PROCESS

AMONG IBEP STUDENT

Alyanur1 Aqilla Fadya2 Niswatun Chaira3 Putri Zidni Ayu Meuthia4

International Business Economic Program

Faculty of Economic and Business

Syiah Kuala University, Indonesia

Abstract
Social media is a virtual place which can be Blogs and different websites are used by individuals or
companies to share about them and their products trough internet. Kaplan and Haenlein (2010)
conceptualized social media as an internet-based program that provides a platform for consumers to
express their own opinions, share information and past experiences using different social networks, blogs
and other content areas.

The efficiency of social media has empowered the marketers and customers with fast interaction and
communication processes to enhance customer service, increase brand awareness and build strong
customer–brand relationships. Using social media tools, consumers will have the chance to express their
opinions to a larger number of individuals and also find the desired information quickly without incurring
much cost (Severi et al., 2014).

This study aimed to determine how the influence of social media for purchase making process. According
to result that got from survey or questionnaire, consumer’s decision making influenced by the Informative
and the alternative of social media.

Keyword : social media, consumer’s decision-making process , IBEP students.

1
Alyanuribrahim29@gmail.com
2
Aqillafadya23@gmail.com
3
niswatunchair@gmail.com
4
putrizidnii@gmail.com
Introduction
Social media was coined from the two operating words – social and media. Social, in this context, simply
means the interaction between individuals of common interest, a group, or even a community. And media
as the name implies, is the medium, channel, or platform on which allows for creation and exchange of
user-generated contents. Social media is less than two decades in existence but have gained widespread
acceptance.

Evans, Jamal and Foxall (2009) observe that the growth of social media have become important
communication channels and virtual communities have emerged that may never meet in the physical
world but nevertheless can affect behavior including purchasing decisions. Social media is commonly
associated with social networks such as Facebook, My Space, LinkedIn (Boyd & Ellison, 2007).
Additionally, social media has recently outpaced email as the most popular online activity and has
enabled consumers to connect with others by sharing information, opinions and thoughts about products
and brands.

Mangold and Faulds (2009) opined that social media has great influence on every stage of consumer
decision making processes. Nowadays consumers trust more user reviews and online consumer
recommendations on social media websites rather than traditional media before making a purchase
decision. Social media has become an important source for consumers who are seeking to obtain product
information and created a platform for them to share their opinions about products and brands (Chung &
Buhalis, 2008). Effective management and implementation of social media marketing is one of the key
objectives and interests of several brands (Hanaysha, 2016).

Literature Review :
Social Media
According to Beer & Burrows (2007), social media is a virtual place which can be Blogs and different
websites are used by individuals or companies to share about them and their products trough internet.
Kaplan and Haenlein (2010) conceptualized social media as an internet-based program that provides a
platform for consumers to express their own opinions, share information and past experiences using
different social networks, blogs and other content areas.

The efficiency of social media has empowered the marketers and customers with fast interaction and
communication processes to enhance customer service, increase brand awareness and build strong
customer–brand relationships. Using social media tools, consumers will have the chance to express their
opinions to a larger number of individuals and also find the desired information quickly without incurring
much cost (Severi et al., 2014). Social media is an important marketing communication tool to reach and
interact with customers at minimal cost and at different times of the day.

Social media characteristics that influence consumer’s purchase decision :

Psychological Influences by information

Most consumers, even the most rational ones, will somehow be influenced by emotions or
recommendations of peers. For instance, when someone is browsing through Facebook without any
purchase intentions but see a live demonstration of the latest iPhone by a KOL or celebrity on social
media, one would rationalized its buying decision by emotions when looking up all the new cool features
of the gadget.

• 78% of consumers said that social media posts impact their buying decisions
 • 47% of consumers who purchase a product via social media said they had not thought about
buying it but it just happened upon it.

Peer Recommendation

According to Hubspot data, 71% of people are more likely to make a purchase online if the product or
service comes recommended by others. This may be driven by millennials inherent distrust of brands and
traditional advertising. They simply tend to believe what their peers say, seek their opinions and often
validation.
According to Forbes’s research on consumer engagement with different businesses via social media
networks, it is found that 81 percent of respondents agreed that recommendations and posts from family
and friends directly influenced their buying decisions.

Consumer’s Decision-making process

The consumer decision-making process can be described as the phases that consumers go through in
making a final purchase decision. The task of a marketer is to focus on the whole purchasing process
instead of emphasizing solely on a purchase decision, because consumers experience different phases
before reaching a conclusion (Basil et al., 2013).

In consumption, consumers pass through different stages that put together form theconsumer’s purchasing
decision-making process (Belch and Belch, 2003). Specific stages are involved in this process. Hoyer and
MacInnis (2010) and Sternthal and Craig (1982) recognized five stages that are ‘Need Recognition’,
‘Information Search’, ‘Evaluation of Alternatives’, ‘Decision Making’ and ‘Postpurchase Evaluation’. In
their purchasing decision-making process, consumers are often influenced by both internal and external
influences (Belch and Belch, 2003).

IBEP Student
According to oiaunsyiah.ac.id, IBEP or International Business Economic Program was founded in 2005,
the program was formerly named “Pre‐International Class” (PIC). It was then in 2011, the program has
been “International Accounting Program” (IAP). It is an international undergraduate program under the
Department of Accounting, Faculty of Economics, Syiah Kuala University, Banda Aceh. In 2017, IAP
emphasized to be IBE Program that also include Management and Economic Development students. The
program is fully organized with English as its instructional language. International curriculum has been
integrated into a formal teaching‐learning process.

Methodology
The type of research that will be used in this study is qualitative and quantitative research. Qualitative
researchers aim to gather an in-depth understanding of IBE student behavirand the reasons that govern
such behavior. The discipline investigates the “why” and “how” of decision making. Besides this, the
researcher will also examine the phenomenon through observations in numerical representations and
through statistical analysis.
Data Sources
The data use the primary data which is got from quessionery that filled by some correspondent. The
questionnaire was divided into two sections. Section one of the questionnaire aimed at capturing the
general information of the respondents such as gender and time spent of social media among others.
Section two, questionnaires included close-ended questions which were in form of a 5-point Likert scale
(agree, strongly agree, neutral, disagree or strongly disagree) based on the research objectives and also
open ended questions.

Population
The total population in this research will all be coming from all IBEP students from batch 2014 to 2017 in
Business and Economic Faculty, Syiah Kuala University. The researcher choose Business and Economic
Faculty because of the socio-economic conditions present in the area that is relevant to the study and also
as it fits the time frame and resources of the researcher. The number of the population of IBE Program is
about 60 persons.

Sample and Data Collection

In order to answer the research, question a primary data collection was used. Using primary data
collection allowed addressing specific issues to IBEP Student about their use of Social Media and how
these media specifically influence their purchase decision-making processes. The research use approach
the quessionery that filled by 25 correspondent of 60 population.

Data Analysis
Data analysis as a process of gathering, modelling and transforming data with an aim of retrieving useful
information, suggesting conclusions and supporting decision making, further notes that before data can be
analysed and presented it has to be organized. Organization involves putting the data into some systematic
form. Eviews 9.5 Lite was used to aid in data analysis. Tables and figures were preferred as they give a
clear understanding of the research interpretation for easy understanding of the phenomenon under study.
Figures were used to indicate the number of occurrence of responses to particular questions graphically.

Y=a+b1X1+b2X2+e

Description :

Y : Influences social media on purchase decision

X1 : Informative; providing useful or interesting information.
X2 : Alternative; (of one or more things) available as another possibility.
a : Constanta
e : Other unresearch variable

Questionnaire for Respondents

Section 1 : General Information

1. Gender of Respondents :
[] Male [] Female
2. Which of the following social media sites do you mostly access :
[] Facebook [] Twitter [] Instagram [] Youtube [] WhatsApp []Line [] Other (s)……..
 3. Time (approx.) spent on social media sites per day :
[] 0 hour [] 1-3 hours [] 4-6 hours [] 6-10 hours [] 10 hours or more.
4. Does social media trigger you to purchase a product or service?
YES [] NO [] Not Sure []

Section 2 :

The question for Variable (Y):

Strongly Strongly
Disagree Uncertain Agree -Agree
disagree
No. Question
1 2 3 4 5

Social media stimulates you to recognize a need

1
for something before buying it
Social media triggers you to purchase a product
2
through its advertisements.
You always achieve a desire for something new
3
through social media
Social media provides solutions on what to buy,
4
where to buy and why to buy

The question for Variable (X1)

Strongly Strongly
Disagree Uncertain Agree -Agree
disagree
No. Question
1 2 3 4 5

Information search about a product is easier in

1 social media.

Social media influences you to try new products

2 based on the reviews by friends.

Social media is an effective tool for different

3 opinions about new and existing products.

You search for product’s information in social

4
media before a purchasing it.

The question for Variable (X2)

Strongly Strongly
Disagree Uncertain Agree -Agree
disagree
No. Question
1 2 3 4 5
 Interactions with friends on social
media assist you in evaluating a
Q4

5
4
5
5
4
4
5
4
4
5
3
5
product.
According to quetionnairre that sent to respondents by Google Form link, the researcher got the data as

Social media allows you to filter any

information of a product based on
Q3

5
4
4
5
3
5
4
4
3
5
4
5
chat forums.
X2

Social media changes your initial

purchase choice after attaining
Q2

5
4
4
4
4
5
4
3
3
5
3
5
relevant information.
Social media has a higher credibility
than traditional media (newspaper,
Q1

2
4
3
4
4
5
5
4
2
5
4
5
magazines, etc)
You search for product’s information
in social media before a purchasing it.
Q4

5
3
5
5
4
5
5
4
2
5
5
5
Q3 Social media is an effective tool for

2
2
4
5
4
5
4
4
2
5
3
5
X1 different opinions about new and
existing products.
Social media allows you to filter any information

Social media influences you to try

Interactions with friends on social media assist

Q2
traditional media (newspaper, magazines, etc)

new products based on the reviews by

3
2
5
5
3
5
4
4
2
5
3
4
choice after attaining relevant information.
Social media changes your initial purchase

friends.
Social media has a higher credibility than

Information search about a product is

Q1
easier in social media.

3
4
5
5
4
5
4
4
3
4
5
5
of a product based on chat forums.

Social media provides solutions on

Q4
what to buy, where to buy and why to

3
3
4
3
4
3
4
3
2
4
3
4
you in evaluating a product.
buy
You always achieve a desire for

Q3
something new through social media

3
1
4
3
3
4
4
4
3
4
3
2
Y
Social media triggers you to purchase
a product through its advertisements.

Q2
Finding and Result

3
2
4
5
3
5
4
3
4
4
3
3
Social media stimulates you to
recognize a need for something

Q1
before buying it

3
3
4
5
4
3
4
3
3
4
3
3
below :
Number of Respondents

10
11
12
4
1

1
2
3
4
5
6
7
8
9
13 1 1 3 3 3 3 1 3 1 5 5 1
14 3 3 3 3 3 3 3 3 3 3 3 3
15 1 1 1 2 2 2 3 3 3 3 2 3
16 5 3 2 4 5 4 4 5 4 3 4 5
17 5 3 3 3 3 3 3 3 3 3 3 3
18 3 3 3 3 3 3 3 3 3 3 3 3
19 3 3 1 3 3 3 3 3 3 2 4 3
20 5 5 4 5 5 4 4 5 4 4 4 4
21 4 5 5 5 5 4 4 5 4 4 4 5
22 5 5 3 4 5 5 5 3 5 5 4 4
23 4 3 3 4 5 3 4 4 4 4 4 4
24 4 4 3 4 3 4 4 4 4 4 4 4
25 4 3 4 4 5 5 4 4 5 5 4 4

Response Rate

All the respondents were drawn from IBEP Student. A total of 60 questionnaires were also administered
to the IBE Program Line Group, 25 were completed and returned representing a 41,67% response rate.

Gender of the Respondents

The study sought to determine the gender of the respondents, 64% were revealed to be female while male
comprised of 36% percent of the sample population as shown in the chart below :

Social Media Tools

Preferences of social media tools impacts on consumer decision making. The study therefore sought to
determine the preferred social media tools. 84% of the respondents preferred Instagram as opposed to 4%
of the respondents who preferred Twiter as shown in bar.
Time Spent in Social Media Sites

It was important for the study to establish the frequency of using social media within a day to establish
the relevance of the study. The study therefore revealed that 36%, spend 4-6 hours in social media sites,
followed by 28% who spend 6-10 hours in various social media sites.

Based on this data, the researches analyze by operate eviews 9.5 :

Dependent Variable: Y
Method: Least Squares
Date: 05/31/18 Time: 13:50
Sample: 1 25
Included observations: 25

Variable Coefficient Std. Error t-Statistic Prob.

X1 0.786465 0.240064 3.276067 0.0035

X2 -0.117152 0.304215 -0.385095 0.7039
C 0.812388 0.654088 1.242016 0.2273

R-squared 0.574849 Mean dependent var 3.370000

Adjusted R-squared 0.536199 S.D. dependent var 0.813685
S.E. of regression 0.554144 Akaike info criterion 1.769381
Sum squared resid 6.755655 Schwarz criterion 1.915646
Log likelihood -19.11726 Hannan-Quinn criter. 1.809949
F-statistic 14.87314 Durbin-Watson stat 1.643311
Prob(F-statistic) 0.000082

P-value of INFORMATIVE 0.0035 < α (α = 5%), means that H0 rejected and Ha accepted. It shows that
INFORMATIVE have the effect significantly to consumer’s DECISION.

P-value of ALTERNATIVE 0.7039 > α (α = 5%), means that H0 accepted and Ha rejected. It shows that
ALTERNATIVE have NO effect significantly to consumer’s DECISION.

From the output, the coefficient of INFORMATIVE is 0.786465. this value means that there is a positive
relationship between INFORMATIVE and DECISION with the implication that every unit increase in
INFORMATIVE in social media sites are predicted to be accompanied by 0.786465 units increase in
consumer’s DECISION. The standard error of the regression coefficient is 0.240064. This value identifies
limit of error is expected to be inherent in the result. From the result, the expected error in the result is
plus or minus 24%.

Then, the coefficient of variable ALTERNATIVE is -0.117152 that means there is a negative relationship
between ALTERNATIVE and DECISION with the implications that 1 unit increases of ALTERNATIVE
in social media is predicted to be accompanied by 0.117152 unit decreases of consumer’s DECISION.
The standard error of the regression coefficient is 0.304215. This value identifies limit of error is expected
to be inherent in the result. From the result, the expected error in the result is plus or minus 30%.

R-Square (coefficient of determination) and this gives the value of 0.575849. This value implies that
INFORMATIVE and ALTERNATIVE can be relied on to explain 57.58 % of the variations in cosumer’s
DECISION. Sample represents the total population approx. more than 50%.

The second starred item Adjusted R-Square is basically the same as R-Square above R-Square adjusted
for error in data. The result also indicate that the level of error is negligible (approximately 0.42%).
Conclusion
According to result that got from survey or questionnaire, consumer’s decision making influenced by the
Informative and the alternative of social media. The information that social media’s user got can influence
the purchase decision significantly. Then, the social media has the influence too for making decision to
choose the alternative product, but not a big impact.

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